Notes on Catalyzing Health, April 2024: Providing, Partnering & Persisting—The Importance of XIRs in Driving Development

Lara Mangravite, PhD
Geoffrey W. Smith

Lara Mangravite, PhD & Geoffrey W. Smith

April 12, 2024

Digitalis Commons is committed to catalyzing health. As an area of particular interest, we have been evaluating the impact that funders —and the parameters that guide their funding—have on the outputs from research and development programs. For commonly used funding strategies, this is well understood. Public research funders tend to prioritize discovery, incenting recipients towards innovation over application. Private investors tend to optimize for commercial returns, incenting recipients to guide product development towards optimal market share. When funders want to incentivize other outputs, they change their funding parameters. Examples include nonprofit-managed venture funds designed to promote targeted economic development, focused research organizations designed to generate tools or public goods, and funding collectives designed to develop shared assets.

One important shift in health research funding is occurring within existing public and non-profit funding organizations. Traditionally focused on scientific discovery, many organizations are shifting resources to add support for the D of R&D—the development of health solutions that are ready to be delivered to patients and consumers. These investments often focus on products perceived to address unmet needs in existing markets. This includes products intentionally designed to be low in cost or to address highly targeted, and thus smaller, markets. The Cystic Fibrosis Foundation was an early non-profit adopter of this strategy when they famously funded Vertex to develop CF treatments.  More recently, the US and other governments have taken this approach to speed development of products deemed essential to national security and population health—such as the funding of rapid development for vaccines and at-home rapid tests for SARS-CoV-2 during the pandemic.

As these funders shift focus towards product development, they are faced with important considerations on how to adapt funding structures, program design, and progress assessments to maximize success. While creativity and exploration in discovery programs are well-served by the provision of stable funding over multiple years, funding for product-focused programs need to also optimize for flexibility and accountability. Private sources of capital, such as at venture capital funds such as our sister organization Digitalis Ventures, often address this by structuring funding over multiple tranches gated by predefined success metrics. Through frequent progress assessments, VC’s can adapt support to meet the evolving needs of each program. As a product advances tangibly, additional support can be deployed. In contrast, program failures can be rapidly identified so that they can be refactored or cut. This strategy requires that funders have a clear understanding of evaluation criteria that align with market needs so that successful technologies are attractive economic propositions. Because most public and non-profit funding agencies select employees based primarily on their scientific or technical knowledge, their experience with management of development projects and their relationship to commercial markets is variable.

Many basic research funders have developed “translational research” programs to advance discoveries into early product prototypes that may be attractive to private funders. In these cases, research scientists are also required to shift focus when they seek to mature technologies past the discovery stage. Most researchers have no training and little experience in product design or development. In the academic setting, criteria for career advancement have historically been based on intellectual discovery, and not on product or commercial success. Because of this, researchers are at risk of designing intellectually interesting technological prototypes that have limited real-world application because they do not anticipate developmental or commercial constraints. Commercial expertise – through partnership or mentorship – can help to integrate down-stream needs into design and development strategies, saving money and time, and increasing the chance that a new discovery will benefit patients and consumers.

We recognize a simple solution to these issues:

• Provide funders and researchers engaged in early-stage technological innovation access to world-class experts who have intimate knowledge of their product domain.

• Partner with these experts early to ensure development strategies and market needs are integrated into program/product design from the outset.  

• Persist in these advisory partnerships throughout the development process to ensure deep understanding of the opportunity and the proposed solution.

To test this hypothesis, we have developed the Digitalis Commons Expert-In-Residence (XIR) network. The network contains senior experts with decades of experience across a broad range of product domains and organizational structures including start-ups, corporations, investment funds, incubators and accelerators. They are committed to supporting the advancement of big ideas in health from concept to product.

The network operates as a collective to ensure that individuals with domain-relevant experience are available to provide:

• Strategic mentorship to advise on transition/development planning

• Specialists to advise on required activities (e.g., regulatory planning or market-access)

• Access to an extended network that can be engaged for additional consultation as needs for a given program to develop over time

The Digitalis Commons XIR Network has launched in support of our first foundational partner, Advanced Research Projects Agency for Health (ARPA-H). As the newest US federal health research funding agency, ARPA-H funds high risk, high reward translational research programs that address blue-sky problems and are designed to build early-stage technologies into health solutions for all. Each program prioritizes access, equity, and excellence. The Digitalis Commons XIR Network operates in partnership with PATIO, ARPA-H’s transition office, to support program teams in optimizing transition-readiness of their technologies.

The Digitalis Commons XIR network is the first of what we hope will be many services launched by the Commons.  Through these activities, we aim to improve dramatically success rates for translation of early-stage technologies from the proverbial bench to the bedside.  We are looking for experienced individuals to join the network and for partners who are interested in engaging with it. Come join us in catalyzing health.

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First Five
First Five is a curated list of articles, studies, and publications that have caught our eye on the topics of public goods and emerging applied technologies.

1/ Evolution of the Research Organization
Research organizations are each structured to optimize for a certain kind of research output. By diversifying organizational structures, we can expand the breadth of research that is produced. This list compiles a suite of innovative structures that have (or are currently) been tested.

2/ Responsible AI as a business strength

Following the paradigm that you can’t bolt-on values, Responsible Innovation Labs is an emerging nonprofit that is developing resources to guide investors and founders in how to bake responsible AI practices directly into business strategy for the design and scale-up of technologies.

3/ Funding collective that addresses global women’s health

Big sticky problems can rarely be solved with one idea. Increasingly, collectives are working problems using a range of tools—including funding, innovation, economic development, and policy. A recent collective lead by the Women’s Tennis Association is expanding their toolkit to address nutritional solutions to global women’s health.

4/ Climate change increases existing health challenges
How will climate change impact human health? Primarily by increasing the prevalence of existing health challenges—and this includes mental health. A recent editorial in Nature evaluates the expanded need for mental health support caused by the climate crisis.

5/ Replacing scientific publishing with preprints
Preprint servers have risen over the past decade as a public good (and increasingly popular mechanism) that enables scientists to rapidly share results in advance of the lengthy peer-review process. However, funders are increasingly shifting policies to promote the use of preprints as a replacement for rather than a supplement of peer-reviewed scientific publishing, as evidenced by a recent policy-change by the Bill & Melinda Gates Foundation.